Inseego Reports First Quarter 2017 Financial Results

SaaS, Software and Services Revenues Increased by 9.4% Year-Over-Year
for the First Quarter

Subscribers for Ctrack™ IoT Telematics Solutions Grew by 15.7%
Year-Over-Year for the First Quarter

Sale of MiFi® Mobile Broadband Business to T.C.L. Remains Subject to
Regulatory Approval by CFIUS

May 10, 2017 04:05 PM Eastern Daylight Time

SAN DIEGO--(EON: Enhanced Online News)--Inseego Corp. (Nasdaq: INSG) (the “Company”), a leading global provider
of software-as-a-service (“SaaS”) and solutions for the Internet of
Things (“IoT”), announced financial results for the first quarter ended
March 31, 2017.

“Our first quarter business performance was not what we had hoped as the
pending MiFi divestiture transaction resulted in management and
operational distraction throughout the quarter. We continue to see
financial strength and market opportunity for our portfolio of SaaS,
software and services solutions for the Internet of Things, and we need
to drive excellence in execution throughout the organization,” said Sue
Swenson, Chair and CEO of Inseego. “We now have 633,000 total
subscribers for our comprehensive IoT solutions, including 428,000
subscribers for our Ctrack telematics offerings. The Ctrack business, in
particular, operates in a vibrant environment, with a physical presence
in global regions experiencing rapid telematics growth and a portfolio
of products that address a wide variety of targeted and emerging market
needs. While we remain dedicated to the completion of our corporate
transformation from a hardware supplier into a pure-play IoT solutions
provider, in the event that the sale of the MiFi mobile broadband
business to T.C.L. is blocked by the U.S. government, we would consider
all strategic alternatives available with respect to the MiFi mobile
broadband business or otherwise.”

First Quarter 2017 Financial Highlights

The Company announced the following U.S. GAAP (“GAAP”) financial results
for the first quarter of 2017:

Revenue decreased by 17.2% to $55.4 million in the first quarter of
2017, compared to $66.9 million in the first quarter of 2016. The
Company’s overall revenue decrease was driven by reduced standalone
hardware sales, particularly from the Company’s MiFi mobile broadband
business, the pending divestiture of which is discussed below.

Revenue from the Company’s Ctrack™ solutions, which includes a mix of
hardware and SaaS, software and services sold as a bundled telematics
solution, increased by 2.0% to $15.3 million in the first quarter of
2017 from $15.0 million in the first quarter of 2016. Revenue from
Ctrack products decreased sequentially by 9.5% in the first quarter of
2017 from the fourth quarter of 2016, consistent with a seasonal
decline of 9.6% in the first quarter of 2016 from the fourth quarter
of 2015.

Revenue from SaaS, software and services increased by 9.4% to $14.0
million in the first quarter of 2017, from $12.8 million in the first
quarter of 2016, as the Company continued its focus on IoT SaaS,
software and services solutions, including its Ctrack telematics
solutions. Revenue from SaaS, software and services generated 25.3% of
the Company’s total revenue in the first quarter of 2017, compared to
19.1% of total revenue in the first quarter of 2016. Revenue from
SaaS, software and services decreased sequentially by 6.0% in the
first quarter of 2017 from the fourth quarter of 2016 due to a
combination of lesser sales of third party products and associated
service offerings by Inseego North America (formerly known as FW) as
well as reduced revenues from user-based insurance and consumer
telematics offerings by Ctrack in South Africa.

Revenue from hardware products was $41.4 million in the first quarter
of 2017, a decrease of 23.5% from $54.1 million in the first quarter
of 2016. The Company continues to strategically de-emphasize lower
margin hardware-only sales in favor of bundled solutions that include
higher-margin SaaS, software and services offerings.

Net loss was ($16.1 million), or ($0.28) per share, in the first
quarter of 2017, compared to a net loss of ($11.9 million), or ($0.22)
per share, in the first quarter of 2016. Net loss in the first quarter
of 2017 includes $2.4 million of charges primarily related to the
Company’s MiFi business divestiture activities and 2015 acquisitions,
and $0.8 million of restructuring charges.

As of March 31, 2017, the Company had cash and cash equivalents of
$6.4 million, declining from $9.9 million at December 31, 2016.

The Company also announced the following non-GAAP financial results for
the first quarter of 2017. A reconciliation of these non-GAAP financial
measures to the Company’s GAAP financial results is included in the
tables accompanying this news release:

The Company’s overall non-GAAP gross margin decreased to 31.8% in the
first quarter of 2017, compared to 35.2% in the first quarter of 2016,
primarily due to a decline in the Company’s non-GAAP gross margins for
its MiFi mobile broadband products that offset the Company’s strategic
transition toward an improved mix of higher-margin IoT solutions with
significant SaaS and recurring revenue components. Non-GAAP gross
profit was $17.6 million in the first quarter of 2017, a decrease of
25.4% compared to $23.6 million in the first quarter of 2016, due to a
combination of a $12.7 million decline in hardware revenue and reduced
gross margins from hardware revenue.

Non-GAAP gross margin on SaaS, software and services decreased to
67.7% in the first quarter of 2017, compared to 71.5% in the first
quarter of 2016, primarily due to reduced revenues from user-based
insurance and consumer telematics offerings by Ctrack in South Africa.

Non-GAAP gross margin on hardware products decreased to 19.7% in the
first quarter of 2017, compared to 26.6% in the first quarter of 2016,
primarily due to reduced gross margins on the Company’s MiFi mobile
broadband products in the first quarter of 2017.

The Company’s Ctrack telematics solutions which include a mix of
hardware, SaaS, software and services, generated non-GAAP gross
margins of 65.0% in the first quarter of 2017, compared to 63.7% in
the first quarter of 2016.

Non-GAAP operating expenses decreased by 6.1% to $22.9 million in the
first quarter of 2017, compared to $24.4 million in the first quarter
of 2016, primarily due to restructuring initiatives undertaken since
2016 to improve the Company’s strategic focus on its most profitable
business lines while de-prioritizing certain hardware-only product
lines to non-carrier customers.

Adjusted EBITDA decreased to ($3.2 million) in the first quarter of
2017, compared to $1.3 million in the first quarter of 2016, primarily
due to the reduced hardware revenues and reduced gross margins from
the Company’s MiFi mobile broadband products, as well as increased
litigation costs for defense against an intellectual property
infringement lawsuit won by the Company in April 2017. Adjusted EBITDA
contributed by Ctrack’s telematics solutions increased by 4.5% to
$2.3 million in the first quarter of 2017 from $2.2 million in the
first quarter of 2016.

Non-GAAP net loss for the first quarter of 2017 was ($8.1 million), or
($0.14) per share, compared to ($4.3 million), or ($0.08) per share,
in the first quarter of 2016, consistent with the trend in adjusted
EBITDA described above.

Subscriber Metrics

Q1-2017

Q4-2016

Q1-2016

Ctrack Fleet Subscribers

189,000

187,000

164,000

Ctrack Non-Fleet Subscribers

239,000

245,000

206,000

Inseego North America Subscribers (f/k/a FW Subscribers)

205,000

188,000

164,000

Total Consolidated Subscribers

633,000

620,000

534,000

Closing of $20.0 Million Financing Transaction

The Company announced today that on May 8, 2017, it closed the funding
of a term loan in the principal amount of $20.0 million (the “Loan”)
with a maturity date of May 8, 2018 (the “Maturity Date”). The Loan is
secured by a first priority lien on substantially all of the assets of
the Company, including its equity interests in certain of its direct and
indirect subsidiaries, subject to certain exceptions and permitted
liens. Interest on the Loan will be payable on the last business day of
each calendar month and on the Maturity Date. The Loan will bear
interest at a rate per annum equal to the three-month LIBOR, but in no
event less than 1.00%, plus 10.00%. The Company also paid a $2.0 million
commitment fee in conjunction with the closing of the Loan, and is
required to repay the Loan with the proceeds from any sale of
significant assets, including its pending divestiture of its MiFi mobile
broadband business. In addition, upon entering into the Loan described
above, the Company terminated its revolving credit facility with Wells
Fargo Bank, National Association.

Divestiture of MiFi Mobile Broadband Business and Strategic
Transactions

On April 24, 2017, the Company announced that in connection with the
proposed sale of its MiFi mobile broadband business, with its
subsidiary, Novatel Wireless, Inc. (“Novatel Wireless”), to T.C.L.
Industries Holdings (H.K.) Limited and Jade Ocean Global Limited
(together with the Company and Novatel Wireless, the “Parties”), the
Parties voluntarily withdrew and re-filed the Joint Voluntary Notice
that they had previously submitted to the Committee on Foreign
Investment in the United States (“CFIUS”) under the Defense Production
Act of 1950 in order to provide additional time for CFIUS to evaluate
possible terms of mitigation which would allow the transaction to be
approved.

The Parties and CFIUS have been working for four months to identify
mitigation terms, and with CFIUS’s consent for the second time since the
review process commenced, the parties were permitted to withdraw and
re-file in order to initiate a new period of review.

In the event that the sale of Novatel Wireless to T.C.L. is not
permitted by the U.S. government, the Company would need to consider all
strategic alternatives available to it with respect to the MiFi mobile
broadband business or otherwise, including other divestiture
opportunities.

Second Quarter Outlook

The following statements are forward-looking and actual results may
differ materially. Please see the section titled “Cautionary Note
Regarding Forward-Looking Statements” at the end of this news release. A
more detailed description of risks related to our business is included
in the reports filed by the Company with the Securities and Exchange
Commission (the “SEC”). Our guidance for the second quarter of 2017
reflects current business indicators and expectations as of the date of
this news release, including current exchange rates for foreign
currencies.

Given the pending divestiture of the Company’s MiFi mobile broadband
business, the Company will not provide overall corporate guidance for
the second quarter of 2017. However, in order to provide visibility into
some of the Company’s core metrics, including one of the Company’s key
post-divestiture businesses, the Company is providing guidance for the
second quarter of 2017, as follows:

Inseego Consolidated

Second Quarter 2017 Outlook

SaaS, Software and Services Revenue

$14.0 million - $15.0 million

Adjusted EBITDA

($0.2 million) - ($0.4 million) per calendar month

Ctrack

Revenue

$15.0 million - $16.5 million

Non-GAAP Gross Margin

60% - 65%

Adjusted EBITDA

$2.0 million - $3.0 million

Conference Call Information

Inseego will host a conference call and live webcast for analysts and
investors today at 5:00 p.m. ET. To access the conference call:

In the United States, call 1-844-881-0135

International parties can access the call at 1-412-317-6727

Inseego will offer a live audio webcast of the conference call, which
will be accessible from the “Investors” section of the Company’s website
at investor.inseego.com.
The webcast will be archived for a period of 90 days. An audio replay of
the conference call will also be available beginning one hour after the
call, through May 24, 2017. To hear the replay, parties in the United
States may call 1-877-344-7529 and enter access code 10097515#.
International parties may call 1-412-317-0088 and enter the same code.

About Inseego Corp.

Inseego Corp. (Nasdaq: INSG) is a leading global provider of
software-as-a-service (SaaS) and solutions for the Internet of Things
(IoT). The Company sells its telematics solutions under the Ctrack
brand, including its fleet management, asset tracking and monitoring,
stolen vehicle recovery, and usage-based insurance platforms. Inseego
Corp. also sells business connectivity solutions and device management
services. Inseego Corp. has over 30 years of experience providing
customers with secure and insightful solutions and analytics, with
approximately 633,000 global subscribers, including 189,000 fleet
management subscribers. The Company is headquartered in San Diego,
California. www.inseego.com
Twitter @inseego

Cautionary Note Regarding Forward-Looking Statements

Some of the information presented in this news release may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. In this context, forward-looking
statements often address expected future business and financial
performance and often contain words such as “may,” “estimate,”
“anticipate,” “believe,” “expect,” “intend,” “plan,” “project,” “will”
and similar words and phrases indicating future results. The information
presented in this news release related to our outlook for the second
quarter ending June 30, 2017 and our future business outlook, the future
demand for our products, the expected timing and impact of anticipated
divestiture and restructuring activities, prospects for CFIUS approval
and satisfaction of other closing conditions related to the sale of the
MiFi mobile broadband business, statements made by Sue Swenson, as well
as other statements that are not purely statements of historical fact,
are forward-looking in nature. These forward-looking statements are made
on the basis of management’s current expectations, assumptions,
estimates and projections and are subject to significant risks and
uncertainties that could cause actual results to differ materially from
those anticipated in such forward-looking statements. We therefore
cannot guarantee future results, performance or achievements. Actual
results could differ materially from our expectations.

Factors that could cause actual results to differ materially from the
Company’s expectations include (1) failure to obtain CFIUS approval,
satisfy other closing conditions and complete the sale of the Company’s
MiFi mobile broadband business in a timely manner on the terms
previously approved by the Company’s stockholders; (2) the future demand
for wireless broadband access to data and fleet management software and
services; (3) the growth of wireless wide-area networking and fleet
management software and services; (4) customer and end-user acceptance
of the Company’s current product and service offerings and market demand
for the Company’s anticipated new product and service offerings;
(5) increased competition and pricing pressure from participants in the
markets in which the Company is engaged; (6) dependence on third party
manufacturers and key component suppliers worldwide; (7) the success of
the Company’s corporate development activities, including divestitures
of lines of business that are not essential to the Company’s strategy;
(8) unexpected liabilities or expenses; (9) the Company’s ability to
introduce new products and services in a timely manner; (10) litigation,
regulatory and IP developments related to our products or components of
our products; (11) dependence on a small number of customers for a
significant portion of the Company’s revenues; and (12) the Company’s
plans and expectations relating to acquisitions, divestitures, strategic
relationships, international expansion, software and hardware
developments, personnel matters and cost containment initiatives,
including restructuring activities.

These factors, as well as other factors set forth as risk factors or
otherwise described in the reports filed by the Company with the SEC
(available at www.sec.gov),
could cause actual results to differ materially from those expressed in
the Company’s forward-looking statements. The Company assumes no
obligation to update publicly any forward-looking statements for any
reason, even if new information becomes available or other events occur
in the future, except as otherwise required pursuant to applicable law
and our on-going reporting obligations under the Securities Exchange Act
of 1934, as amended.

Non-GAAP Financial Measures

Inseego Corp. has provided financial information in this news release
that has not been prepared in accordance with GAAP. Non-GAAP gross
profit, gross margin, operating expenses, adjusted EBITDA, net loss and
net loss per share exclude restructuring charges, share-based
compensation expense, amortization of the debt discount and debt
issuance costs associated with the Company’s convertible notes, and
charges related to the Company’s acquisition and divestiture activities.
Adjusted EBITDA also excludes interest, taxes, depreciation and
amortization (unrelated to acquisitions and the convertible notes), and
foreign currency transaction gains and losses.

Non-GAAP gross profit, gross margin, operating expenses, adjusted
EBITDA, net loss and net loss per share are supplemental measures of our
performance that are not required by, or presented in accordance with,
GAAP. These non-GAAP financial measures have limitations as an
analytical tool and are not intended to be used in isolation or as a
substitute for gross profit, gross margin, operating expenses, net loss,
net loss per share or any other performance measure determined in
accordance with GAAP. We present non-GAAP gross profit, gross margin,
operating expenses, adjusted EBITDA, net loss and net loss per share
because we consider each to be an important supplemental measure of our
performance.

Management uses these non-GAAP financial measures to make operational
decisions, evaluate the Company’s performance, prepare forecasts and
determine compensation. Further, management believes that both
management and investors benefit from referring to these non-GAAP
financial measures in assessing the Company’s performance when planning,
forecasting and analyzing future periods. Share-based compensation
expenses are expected to vary depending on the number of new grants
issued to both current and new employees, the number of grants forfeited
by former employees, and changes in the Company’s stock price, stock
market volatility, expected option term and risk-free interest rates,
all of which are difficult to estimate. In calculating non-GAAP gross
profit, gross margin, operating expenses, adjusted EBITDA, net loss and
net loss per share, management excludes certain non-cash and one-time
items in order to facilitate comparability of the Company’s operating
performance on a period-to-period basis because such expenses are not,
in management’s view, related to the Company’s ongoing operating
performance. Management uses this view of the Company’s operating
performance for purposes of comparison with its business plan and
individual operating budgets and in the allocation of resources.

The Company further believes that these non-GAAP financial measures are
useful to investors in providing greater transparency to the information
used by management in its operational decision-making. The Company
believes that the use of non-GAAP gross profit, gross margin, operating
expenses, adjusted EBITDA, net loss and net loss per share also
facilitates a comparison of our underlying operating performance with
that of other companies in our industry, which use similar non-GAAP
financial measures to supplement their GAAP results.

In the future, the Company expects to continue to incur expenses similar
to the non-GAAP adjustments described above, and exclusion of these
items in the presentation of our non-GAAP financial measures should not
be construed as an inference that these costs are unusual, infrequent or
non-recurring. Investors and potential investors are cautioned that
there are material limitations associated with the use of non-GAAP
financial measures as an analytical tool. The limitations of relying on
non-GAAP financial measures include, but are not limited to, the fact
that other companies, including other companies in our industry, may
calculate non-GAAP financial measures differently than we do, limiting
their usefulness as a comparative tool.

Investors and potential investors are encouraged to review the
reconciliation of our non-GAAP financial measures contained within this
news release with our GAAP financial results.